Retiree, health costs draining NJ budget - Fox 2 News Headlines

Report: Retiree, health costs draining NJ budget

Posted: Updated:

By ANGELA DELLI SANTI

New Jersey faces a series of increasingly urgent budget pressures, including keeping pension and health insurance promises to retirees, funding health care for the poor and repairing aging roads and bridges, said three independent experts who published a report examining the state's financial condition Thursday.

The trio, led by former Federal Reserve Chairman Paul Volcker, are taking an unvarnished look at the budgetary strains facing six states: New Jersey, New York, Virginia, Illinois, Texas and California. Their group, called the State budget Crisis Task Force, was in Trenton to discuss their findings as reports on New Jersey and Virginia were being released.

Former New York Lt. Gov. Richard Ravitch and Richard Keevey, from the School of Public Affairs and Administration at Rutgers-Newark, also contributed to the report.

The report describes spiraling retiree and health care costs draining all state budgets. In New Jersey alone, unfunded liabilities to retirees are nearly $85 billion despite sweeping benefits changes enacted last year. New Jersey also needs a way to fund its unmet infrastructure needs, which the report estimates to be at least $133 billion for transportation, wastewater treatment and drinking water during the next decade.

"It became very clear to many of us that for a lot of reasons most states were on the verge of being on unsustainable paths for true fiscal balance. The reasons for this, which are almost uniformly true, are that the cost of pensions and other retiree payments and the costs of health care and Medicaid in particular are rising at rates far greater than the rates at which taxes are being collected," Ravitch said.

New Jersey's reliance on income and sales taxes to fund nearly two-thirds of the state budget also is problematic because collection amounts fluctuate depending on the economy. Untaxed goods and services and untaxed Internet purchases are further eroding the sales tax base, the task force found.

The task force cautioned against using gimmicks to balance the state budget, as governors of both political parties have done in the past, such as raiding funds dedicated to a specific area, such as transportation, and instead using it to fund general operations or borrowing to run day-to-day government.

The task force didn't offer specific budget or policy recommendations. But when asked directly whether the state would need to raise taxes to meet its revenue challenges, Ravitch said, "my guess is ultimately there will have to be more revenue to meet the basic obligations the state has committed to."

More broadly, the experts suggested that state leaders adopt multi-year budget forecasting and replenish the rainy day fund that's been depleted by the most recent recession.

The full report can be viewed online at www.statebudgetcrisis.org.

  • New Jersey NewsNew Jersey NewsMore>>

  • Savion Glover, the master teacher

    Savion Glover, the master teacher

    Wednesday, August 20 2014 10:31 PM EDT2014-08-21 02:31:51 GMT
    While the rest of us merely march to the beat of our own drum, Savion Glover is the drum. The tap dance superstar has dazzled audiences from the small screen to the big screen from the White House to the Great White Way. More than just a legend, Savion has become a curator of tap. He is on a mission to keep the craft sacred for future generations.
    While the rest of us merely march to the beat of our own drum, Savion Glover is the drum. The tap dance superstar has dazzled audiences from the small screen to the big screen from the White House to the Great White Way. More than just a legend, Savion has become a curator of tap. He is on a mission to keep the craft sacred for future generations.
  • Five Guys offers bacon milkshakes

    Five Guys offers bacon milkshakes

    Wednesday, August 20 2014 6:47 PM EDT2014-08-20 22:47:08 GMT
    Burger chain Five Guys is testing the adage that everything tastes better with bacon. It is rolling out a customizable milkshake program and along with bananas, peanut butter, Oreo cookies, salted caramel, you can chose bacon.  Yes that's right: a bacon milkshake.
    Burger chain Five Guys is testing the adage that everything tastes better with bacon. It is rolling out a customizable milkshake program and along with bananas, peanut butter, Oreo cookies, salted caramel, you can chose bacon.  Yes that's right: a bacon milkshake.
  • Designer clothes at giant thrift shop in NJ

    Designer clothes at giant thrift shop in NJ

    Wednesday, August 20 2014 5:57 PM EDT2014-08-20 21:57:04 GMT
    Like most soon-to-be third graders, Sonja knows what she's looking for when it comes to back-to-school shopping. For kids trying to be fashionable -- and parents looking to keep it affordable -- there's the Ocean County Hunger Relief Warehouse in Toms River, New Jersey. It's basically a huge thrift shop.
    Like most soon-to-be third graders, Sonja knows what she's looking for when it comes to back-to-school shopping. For kids trying to be fashionable -- and parents looking to keep it affordable -- there's the Ocean County Hunger Relief Warehouse in Toms River, New Jersey. It's basically a huge thrift shop.
Powered by WorldNow

WJBK-TV | Fox 2
16550 West Nine Mile Rd.
Southfield, MI 48075

Main Station: (248) 557-2000
Newsroom: (248) 552-5103

Didn't find what you were looking for?
All content © Copyright 2000 - 2014 Fox Television Stations, Inc. and Worldnow. All Rights Reserved.
Privacy Policy | New Terms of Service What's new | Ad Choices